House Price Growth Rebounds, but London Still Lags | UK Property Market Monthly: June 2026

Published: 29 June 202６

Data covering HPI up to April 2026, private rents up to May 2026, and the Bank of England's June MPC decision.

In June, the headline figures for the UK property market turned sharply higher, but the story beneath the surface is more nuanced. Much of this rebound reflects the reversal of last year’s SDLT base effects rather than a sudden return of broad-based market strength. At the same time, London remains the only UK region still in annual decline, while parts of the Midlands and the North have moved back into stronger territory. In this month’s report, we look beyond the headline numbers and focus on the underlying shifts that matter most for investors and buyers.

Executive summary

The headline numbers have whipsawed again. Annual UK house price growth jumped from 0.0% in March to 3.8% in April, the highest reading since March 2025. This is not a sudden market revival but the mirror image of last month's deceleration. Both moves are dominated by the SDLT base effect, with March 2025's pre-SDLT rush and April 2025's post-SDLT collapse now flipping the year-on-year comparison in the opposite direction. Underlying monthly growth was a more modest 0.7%, with a 0.6% rise on a seasonally adjusted basis.

The regional shake-up is even more dramatic. The North East has gone from −1.2% in March to +9.9% in April, the highest regional reading in the UK. Yorkshire and The Humber and the North West both jumped over 8 percentage points to +7.2%. London remained the only region in annual decline at −2.1%, marking nine consecutive months of negative annual growth in the capital. The North-South distortion seen across the past three editions is now in unwind mode.

Rental data offers a calmer narrative. UK average rents reached £1,383 per month in May, with annual growth easing slightly to 3.3% from 3.5% in April. The North East still leads at 5.9% but has slowed from 6.5% the prior month. London remained at 2.0%, the slowest of the English regions.

Policy held but with a more hawkish skew. The Bank of England voted 7-2 to keep Bank Rate at 3.75% on 18 June, with two members now voting for a 25bp increase to 4.00% (Megan Greene and Huw Pill). The hawkish dissent has doubled in two meetings, even as the immediate energy-price pressure has eased following the 14 June Middle East peace deal that pulled Brent crude from above $110 per barrel back to around $79. CPI held at 2.8% in May, although services inflation rose to 3.7%. The next decision is on 30 July, accompanied by a fresh Monetary Policy Report.

Three takeaways for investors this month:

1. The 3.8% headline price growth figure should not be over-interpreted. May 2026 will benefit from the same base effect, but by July the comparison base will normalise and the true underlying trend will be visible. Investors should look through the base-effect noise and focus on monthly seasonally adjusted figures.
2. The Midlands and the North have recaptured the lead. The North East at +9.9%, the North West at +7.2%, and the West Midlands at +5.8% are the strongest regional performers. London's continued annual decline (−2.1%, the ninth consecutive month) means the relative valuation gap between regions has widened further.
3. The mortgage market backdrop is improving. With the peace deal pulling energy prices lower and swap rates softening, fixed mortgage pricing has begun to move down despite the MPC's hawkish drift. Two-year fixes are now available around 3.6% and five-year fixes around 3.7%, modestly below last month's levels.

1. Prices: headline and segment breakdown

The UK House Price Index reached 103.5 in April 2026 (January 2023 = 100), with the average UK property valued at £270,080. Annual inflation jumped to 3.8% from a revised 0.0% in March. Prices rose 0.7% on the month on a non-seasonally adjusted basis (0.6% seasonally adjusted), as the comparison base from April 2025 included a 2.9% monthly fall coinciding with the post-SDLT collapse.

Country-level picture

All four UK countries are now firmly in positive territory. Northern Ireland continues to lead at +7.4% on quarterly data. Scotland has accelerated sharply on the monthly figure (+2.7%) with the annual rate rising to +2.8%. Wales is the only country with a small monthly decline.

Property type: the flat segment has begun to stabilise

A meaningful shift this month. Flats and maisonettes, which posted a −5.3% annual decline in March, are now back to a marginally positive +0.3%. This is again driven by base effects rather than fundamental change, but the magnitude of the move (over five percentage points in one release) shows how much the SDLT distortion was affecting segment-level reads. Terraced houses lead all segments at +5.8%, followed by semi-detached at +5.1%.

Buyer and funding status

• First-time buyers: average £227,994, annual change +4.3% (a sharp reversal from −0.7% in March)
• Former owner-occupiers: £331,844, annual change +3.2%
• Cash purchases: £256,375, annual change +3.6%
• Mortgaged purchases: £279,152, annual change +3.8%

First-time buyer prices have rebounded particularly strongly, which is again partly a base effect (April 2025 saw FTBs especially exposed to the post-SDLT correction).

New build versus existing stock

New build prices have re-accelerated sharply, although sample sizes for recent months remain small and ONS continues to flag higher uncertainty in this segment.

2. Regional opportunity map

Three observations matter for allocation.

Read through the base effect. The headline regional rankings this month are heavily distorted by the April 2025 post-SDLT correction. Areas that saw the largest monthly falls a year ago (the North East, the North West, Yorkshire and The Humber) now show the largest annual rebounds. The genuine underlying trend will become clearer in the May data (published 22 July) and especially the June data (published August), when the base period no longer includes the SDLT cliff edge.

London's structural underperformance continues. Despite a +1.9% monthly rebound, London's annual change at −2.1% is the only negative figure across UK regions, and the ninth consecutive month of annual decline. The SDLT changes had limited impact on the prime London market because most transactions there are well above the affected thresholds, so the base effect that lifted other regions does not flatter London. This makes the London weakness more genuine and less explainable as a comparison artefact.

The Midlands sit in an interesting spot. The West Midlands at +5.8% and the East Midlands at +5.5% combine respectable annual growth, mid-range average prices (£241,620 to £250,625), and proximity to both the North and South. For investors looking past the base-effect noise, the Midlands offer one of the more legitimate sustainable growth stories in this report.

3. Rental market: slight deceleration after a five-month run

The ONS Price Index of Private Rents shows UK average rents at £1,383 per month in May 2026, up 3.3% year-on-year. Growth slowed from 3.5% in April, ending a four-month period of stable or accelerating growth. This is the joint-lowest annual inflation rate since the post-pandemic rental boom began. With house prices up 3.8% and rents up 3.3%, headline running yields have compressed marginally compared with last month, although the gap remains tight.

Country-level rents (12 months to May 2026)

Wales continues to lead at +4.7%. Scotland has slowed sharply to +1.0% from +2.0% in the prior reading, the lowest growth in the four UK countries. This may reflect the unwinding of catch-up effects from earlier rent controls, although the data is provisional.

English regional rent growth

• North East: +5.9% (highest), slowing from +6.5% in April
• London: +2.0% (lowest), unchanged from April

The North East has slowed but retains the highest rent growth in England. The gap to London (3.9 percentage points) is narrowing slightly. Average rents are highest in London (£2,294) and lowest in the North East (£776). Excluding London, the highest-rent local authority is Oxford at approximately £1,958 per month.

Rightmove has flagged that private rents may have stopped rising on its index for the first time since 2017. The PIPR data still shows growth, but the deceleration trend visible in May suggests rental market dynamics may be turning at the margin. Zoopla estimates UK rent growth at 2 to 3% for the remainder of 2026.

Indicative gross yields

Simple gross rental yields using country averages (annualised rent divided by average house price) are as follows.

Scotland's headline yield has compressed from 6.6% to 6.3% as Scottish prices accelerated (+2.7% on the month) while rent growth slowed. England has held at 5.9%, Wales at 4.7%, and Northern Ireland at 5.3%.

These figures are indicative only. Actual investor yields depend on voids, management costs, SDLT surcharges, repair reserves, and location within each country.

4. Transaction volumes: post-base recovery emerging

HMRC's Monthly Property Transactions statistics showed 101,000 seasonally adjusted residential transactions in April 2026, which was 53.2% higher than April 2025 (the post-SDLT trough) but 2.8% lower than March 2026. The dramatic year-on-year jump is again a base effect: April 2025 saw transactions collapse after the SDLT threshold reduction, so the year-on-year comparison flatters the recent reading.

On a non-seasonally adjusted basis between March and April 2026, transactions fell by 16.5% in England, 7.6% in Scotland, 15.5% in Wales, and 11.7% in Northern Ireland. The seasonal pattern (March is typically stronger than April once base effects are stripped out) appears to be in line with historical norms.

The Bank of England's Money and Credit data showed mortgage approvals for house purchase rose to 65,900 in April 2026, well above the six-month average of approximately 63,100. This is the strongest single-month approval figure for some time and points to genuine improvement in pipeline activity, distinct from the noisy completion figures.

The RICS April 2026 Residential Market Survey reported that sales market activity indicators remain firmly negative, although the gap between survey sentiment and the harder mortgage approval data is notable.

Investor read: the SDLT base-effect distortion will continue to dominate year-on-year comparisons through Q2. Mortgage approvals are the cleanest forward indicator currently available and they are improving. The pipeline conditions for Q3 transactions look more constructive than survey responses suggest.

5. Monetary and FX backdrop

Bank of England

The Monetary Policy Committee held Bank Rate at 3.75% on 18 June 2026 in a 7-2 vote. Two members (Megan Greene, Chief Economist Huw Pill) voted to raise Bank Rate by 25bp to 4.00%. This is one more hawkish dissent than the 8-1 split in April. Greene and Pill both cited concerns about second-round effects from the energy shock becoming embedded in wage and price-setting. Pill stated that upside risks to the 2% inflation target had increased and that raising rates to 4% remained the most robust policy response.

The 18 June meeting took place four days after the announcement of a Middle East peace deal on 14 June, which pulled Brent crude back from above $110 per barrel to around $79. This significantly improved the near-term energy inflation outlook compared with the April Monetary Policy Report's central projection.

Bank Rate is now expected to remain at 3.75% through at least the next meeting on 30 July, which is a Super Thursday with a fresh Monetary Policy Report. Market pricing as of mid-June implied roughly one rate hike priced in for 2026, with a Reuters poll of economists showing a range of 3.50 to 4.25% for end-2026 forecasts. The consensus has shifted notably from "modest cuts" earlier in the year to "hold with hawkish risk".

CPI inflation held at 2.8% in May 2026, unchanged from April and below the 3.3% reading from March. However, services inflation rose to 3.7%, which is the MPC's key concern as it represents domestically-generated price pressure that monetary policy can more directly influence. Unemployment edged up to 4.9%, suggesting some loosening in the labour market.

The Bank's quantitative tightening programme continues. Asset holdings stood at £522bn on 17 June 2026, down from a peak of £895bn. A further £70bn of reduction is targeted through to September 2026.

Mortgage market implications

The peace deal and the resulting fall in swap rates have allowed fixed mortgage pricing to move modestly lower despite the MPC's hawkish drift. Top two-year and five-year fixed rates are now reported around 3.6% and 3.7% respectively, slightly below last month's levels. Standard variable rates remain in the 5 to 7% range.

For tracker and SVR borrowers, the June hold leaves payments unchanged. For new borrowers, the swap rate movement following the peace deal has improved the available deals, although the direction from here depends heavily on how services inflation evolves.

GBP/JPY

Sterling traded near ¥213 against the yen in late June 2026, down from approximately ¥214 a month ago and further off the ¥215+ levels of April and early May. The pair has been gradually trending lower as the hawkish BoE narrative has been balanced by improving yen sentiment.

For yen-denominated investors, the implications are threefold.

• The continued modest pullback in GBP/JPY has improved the entry condition for new UK property acquisitions for the second consecutive month, although the cumulative move is still small in absolute terms.
• Existing GBP holdings have given back further translation gains versus the May reference point.
• Volatility has begun to ease following the Middle East peace deal. The Wise high-low range for the past week was approximately ¥213 to ¥215, narrower than the previous month's range of more than seven yen.

6. What to watch in July

• 22 July: UK HPI data for May 2026, which will still be affected by SDLT base effects to some degree
• 30 July: Bank of England MPC decision, fresh Monetary Policy Report, and Bailey press conference
• End of July: HMRC transactions data for June 2026
• 16 July: ONS rents and prices bulletin (June data)

Key questions for next month's edition are as follows. Does May's HPI data show continued strong annual growth as the base effect persists, or do the underlying monthly trends point to something different? Does the MPC see enough disinflation evidence in the post-peace-deal environment to push back on the hawkish dissenters, or does services inflation force further hawkish moves? And does the GBP/JPY pullback continue, or does a hawkish 30 July statement push sterling back up?

Methodology and sources

• Prices and transactions: HM Land Registry UK House Price Index, April 2026 release (published 17 June 2026). The HPI is calculated by the Office for National Statistics using data from HM Land Registry, Registers of Scotland, and Land and Property Services Northern Ireland.
• Rents: ONS Price Index of Private Rents, June 2026 bulletin covering data to May 2026 (published 17 June 2026). PIPR moved from "official statistics in development" to "official statistics" status on 20 May 2026.
• Monetary policy: Bank of England MPC minutes, June 2026; CPI bulletin (May data) released 17 June 2026; Money and Credit statistics, April 2026.
• Transactions: HMRC Monthly Property Transactions Statistics, May 2026 release covering April 2026.
• FX: Spot rates as of 27 June 2026.

The most recent HPI and rent estimates are provisional and subject to revision. The SDLT base effect will continue to distort year-on-year comparisons through the May and June releases. Users should focus on monthly seasonally adjusted figures and on the longer-running trend rather than the noisy annual prints for the next two months.

Disclaimer

This article is provided for general informational purposes only and does not constitute investment, financial, legal, or tax advice, nor a recommendation or solicitation to buy, sell, lease, or invest in any property, region, or financial product. The information is based on publicly available sources, including official UK government and Bank of England publications, considered reliable at the time of publication. However, data accuracy, completeness, and timeliness cannot be guaranteed. Recent UK HPI and ONS rental figures are provisional and subject to revision. Past performance is not a reliable indicator of future results. Property values, rental yields, interest rates, taxation (including Stamp Duty Land Tax and related regimes), and exchange rates can fluctuate significantly. Readers are strongly encouraged to conduct their own due diligence and seek independent professional advice from qualified advisers before making any investment decision.